if i can leave you with one number tonight, 3.41. that is the interest rate. 3.41%, that is a bargain of a deal. that is my two cents more and that is it for tonight "the willis report." melissa: good evening, everybody. we are now 40 days from the more than $600 billion from automatic spending cuts and tax increases that will take place if lawmakers fail to reach a deal before the end of this year. since president obama's reelection, democrats and republicans have staked out their positions on how to resolve this potential crisis. the president wants higher taxes on the rich, specifically over one half trillion over the next decade. >> what i'm concerned about is not finding ourselves in a situation where the wealthy are

not pay more or are paying as much as they should. middle-class families making a difference. lou: house speaker john baena says new revenue should be raised through tax reform, not raising taxes. >> we have talked about this for every year. you can lose all kinds of limitation in doubt. the specifics at this point, would not be conducive to try to come to agree with the white house. lou: who blinks first? we take all that up here tonight. how can the republican party broadened its base following governor romney's defeat? we will be talking with the author of the best-selling book the amateur and former senior staff member and president george w. bush administration's.

we will is what those consequences. >> are principals in door butins the principles upon which thisw nation was founded of the onlyts shortcut to a resurgent economy and the new greatness.idenc lou: coming up short losing the majority of the swing states. joining me now the talk about some of the reasons behind that, the shifting demographics. a former assistant to presidento george w. bush, also with us opera the new york times best-seller the amateur on the obama administration this is as if the obama team did not -- it just knew exactly wat

would unfold. that is how together they were

>> i'll understand that. the cost per ad, the republicans have to pay, many times more than the democrats. they bought there rate and they bought them in a very inefficient way. the whole campaign was just shot through with inefficiency. lou: de think it will be as easy for the republicans to raise money next time? >> people talking about, is there a silver lining for the republican. no doubt there are a lot of attractive potential candidates. you can go on and on. the question is, the base which controls the primary situation,

will they go for any of these people, these populist conservatives overvalue conservatives. lou: let me pose another. i was talking with someone who i will not name. basically the republican party has a strange feeling of being in the buzz around and tells a political party. >> we need to get back to basics. a party of great principle. you can be a member of the republican party and believe 99 percent of what the platform -- 30% of the platform, but if you want to be a member of the party you want to believe in the majority what the party stands for. we had to have a big tent and

encourage people to come in and not be afraid to disagree with party members. it's not our way or the highway. ellis we reach out to people who have an affinity to join us, the problem is taking them for granted. more importantly than that, america needs good, qualified candid it's within the republican party that looks like america. lou: the truth is, if i may say, america needs those leaders with exactly those qualifications and characteristics. you're right. out of the most americans will give a darn weather comes to the republican side of the democratic side if the republicans are going to continue to put out the quality that they have that does not garner the interest, attention, passion of the voter. it is immaterial to most americans were the party is called republican or whether it's called, you know,

rapturous. the fact is the republican party who looks to me as it has often looked over the course of the past 30 years to be in dire straits. >> i agree with you. there is a lack of identification on the part of the voters with the republican party. they look at the republican party and say, that's not me. the republican party has to look more like them, not only physically but to convey their very deep feelings as well. lou: thank you very much. joining me now, global head of international economics. great to have you here. >> good to be here. lou: let's start with this seems to be a little sense that these guys -- these as being the president of the united states and congress, specifically the speaker actually want to do something about the fiscal clef. did you get that read today? >> i think it is increasingly

clear that they are realizing if they don't act, the implicationt for thieon economy are going toe truly first order. going over the cliff, holding the risk of recession in 2013. that is not good for anybody's political future. lou: but i am getting increasingly less interested in political futures on the part of these folks and a lot more interested in the futures of 23 million people who still don't have jobs or are underemployed. a million people who are working part-time and one full-time jobs i mean, the list goes on. 5 billion people have been out of work for six months or longer i guess what i'm saying here is, what about there future and why in the world can't we come to a resolution here before we go to us january 1st and watch all of these traders go into effect? >> the key economic question, the central economic question of the next year to is what it will

take to get the corporate sector to start hiring and investing again, but those millions of unemployed folks back to work and start expanding this deal of protection. i think bottom line is that the corporates are waiting for resolution of uncertainty. lou: what if i am one of those guys are raise my hand, i don't care about corporates, the big behemoth's because 60 to 70 percent of the jobs are being created by small business. i want to get those folks moving, small businessmen and women back on it, and i want to see them just create jobs after job. >> absolutely. i think that the argument for the small firm sector is even more compelling than it is for the large firms. they need to know what their taxes are going to be. they need to know what the regulatory environment is going to be. the need to have an element of confidence before they go out and start hiring again. right now the large firm sector is soccer down, the small firm sector is down 15 or 20 feet

weighing -- waiting for some 60 to come out again. so it's really incumbent upon washington to define the regulatory and the tax and the fiscal landscape in a positive way. lou: and going to go through some of your look. you are saying that if we go over the cliff, tax hikes, spending cuts will translate into sequestration and collapse of the bush tax cuts. the tax hikes and spending cuts would translate into a reduction in economic growth of 4%. that's automatic recession. >> absolutely. so the fiscal cliff is a contraction in the government imposed into the economy of 45% of gdp. on the first order that will hit and reduce economic growth from 2 percent down some-1,-2 very easily. lou: in your judgment would be helpful, profoundly helpful for congress and this president to

agree that there will leave everything, create a status quo for negotiations on a reform of the tax code that would take place over the course of six to nine months next year and hold in abeyance any changes just simply stopping, for the first time in some time ever, congress and our president actually think through public policy. >> absolutely. tax-cut reform on the one hand, and salomon reform on the other. if congress and the president move in that direction it would be a very, very positive signal that the political process is actually functioning. lou: a real quickly, we're out of time. some symbols, reasonable template. >> i think it is. lou: thank you for being here. president obama's reelection reigniting the debate about illegal immigration. what a republican ship on illegal immigration bring hispanic voters under the republican banner?

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joinmend. lou: joining me now, heathereatr macdonald, great to have you with us.u with >> thank you. le lou: your judgment of the mattet of policy. what do you think is the appropriate way forward in term of public policy on the issue of illegalil immigration? >> i would like to move our immi immigration system toward ard a skills based qualification. you come in, not because youave have a family member already here, but because you have sk skills that tihe american econoy needs and language. ah reg with regard to illegalill immigration i think the rule ofr law remains the best way way of making sure that people don't come into the country illegally. the risk of an amnesty, and we

are talking of an imigration reform, that is basically all the are talking about, unfortunately, is amnesty. every amnesty, weather in europe or the united states, has had the effect of attracting more people into e country illegally in the hope of a future amney. lou: years ago i started talking about a rational, effective, humane immigration policy that would take into account all of the concerns about displacement of those who were in this country illegally, due process, make a determination about how work permits and legal status was coferred. that is not enough. the activist groups in this country insist upon one thing, and it is a remarkable demand in my eyes that they insist upon amnesty, and this president is insisting upon amnesty. what is your reaction? >> well, what i worry about most , immigration advocates is

not amnesty, but the incredibly successful campaign to stigmatize any immigration enforcement whatsoever. when you have opposition across the country to a program called secure communities which says to me if you have committed a crie and you entered jail, the jail authorities should notify the federal immigration authority of your presence. that now is viewed as unfair to illegal aliens, we can't even penalize criminals. that means that even if we say, okay, we are going to give amnesty to everybody here, and from this to afford we will start enforcing laws, we won't. lou: political republicans right down unworn and the tempo and the tone of the conversation is surprising, looking at th numbers and saying, despite the faction that they did not even turn of the members they had become the this was the lowest turnout in almost 20 years.

it is -- it is striking that now they're saying that you have to create diversity. and we will take up this issue later in the broadcast. your reaction? gumi, should they do that? is there a panacea in that change in attitude on the part of the republican party? >> first of all, diversity and quotas are ridiculous. we should put the best person for all ways. race, ethnicity, gender should play no role. if republicans believe an amnesty they should enact amsty, but the hope that this is going to deliver significant numbers of current democrat hispanics to the republican party, i think is iu because the main reason that hispanics support the democratic party is economic policies, not immigration. you have 62% to of likely hispanic voters in september

poll by fox saying they supported obamacare. this despite the catholic church is opposition contraception mandate. so much for the social values. they support prop 30 in california to raise taxes on upper income californians and t raise the sales tax. why? because hispanics remain at the lower level of the economic planner, and they use government welfare programs at a very high rate. lou: i welcome this discussion, now being started by the republicans on reforming our immigration laws someone. but i hope that there is not a rush to judgment that somehow moves across this vast sea of facts and realities that have been avoided by both political parties. the american people really need to understand what is happening. the hispanic community needs and understand what is happening. the idea that you are broaching

here that this country should be selecting those it brings into the united states based on their skills, talents, that is going to be a tough sell minette land bridges there down south. >> absolutely, and that is why amnesty is very risky because it means that stopping the flow of illegal aliens from that land bridge is going to be even more difficult. lou:f there is to be an amnesty, it will be the third in the last 26 years. it will be something to watch. >> and we will have a fourth. i can guarantee it. lou: all right. th lou: what happens next? we will lay of the consequences in tonight's "chalk talk." for their annual football trip. that's double miles you can actually use. tragically, their ddy got sacked by blackouts.

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there ♪ aboutlks are lou: well, we're talking aboutcq consequences of elections,ue soe thought we would get right to io and just show h you a fewou a fs consequences of yesterday's vote tallies and the cost thereof. cost, by the way, to you, me, and our fellow citizens.izens. the way, anybody who is under the illusion that this just affect those are making over a million dollars a year, please understand, we are going to introduce rality. grab hold of your chair if you have one nearby. we will talk about the consequence and the cost very quickly. twenty new obamacare taxes kick in, and in that 8389% investment income tax right in behind. and this means that, well, everybody is going to see just under percent added to their capital gains, even the sale of

your house, folks. wait a minute. on middle-class. i just want to be in the middle class. they tell me that wouldn't happen. it's going to happen. on every transaction over a quarter million dollars. $86 billion in medicaid payroll tax kicking in. 65 billion individual employer mandated tax, another 20 billion in medical device tax, and the bush tax cuts are going to go away the first of the year. hang on. that's another just about $80 billion. and we are going to see of 30% tax rate on million-dollar incomes. $200,000 or 250? this is what we don't know, and this is what is going to be worked out. the am, this tax is supposed to be protecting people being sucked up into the inflation

tax. this is going to get middle-class taxpayers, going to affect 26 million people. extended unemployment benefits and. the security, social security payroll tax, that is another impact. $55 billion is the result of sequestration will hit at the an of the year cotton e cuts will hit the defense department. what we are looking at is an amazing, an amazing set of possibilities and shaving $55 billion out of the pentagon budget next year, a million and a half jobs are at risk. as the president is so fond of saying, alexian's do haveand. business leaders laying off workers. the rise of radical islam in the middle east, i cry for the return of sharia law. what it means for them and for us. the author of the extraordinary book. twins. i didn't see them coming.

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the life and liberty of americans, including those killed in an gauzy by ignoring sharia law. joining me now, andrew boston, the author of the new book, sharia versus freedom, the legacy of islamic totalitarianism. t igr lou: it isy great to have you with us.ppreciate we appreciate it. let's start with with, firs, the idea that sharia law, a lot of people this message saying it is a cultural aspect of the islamic life that poses no threat to america. your thoughts. >> sharia is really foundational in islamic societies. it is derived from the text of islam, the traditions of mohammad demanded has many ritual aspects that might be similar to othe religions

demand but it is also an entire political system. and here is where it runs afoul of modern human rights concepts like our bill of rights, the universal declaration of human rights. it includes a timeless war doctrine. it also rejects basic human freedomsike freedom of conscience, freedom of speech, and it imposes discriminatory regulation, legal regulations against non muslim minorities and women. also includes dehumanizing punishments are well we would consider dehumanizing punishments like flashing for our consumption, stoning to death for adultery, and mutilating punishment. lou: and there is no way in which american culture can accommodate each area within a multi-cultural society, part of which would be the muslims? >> absolutely not, certainly not

the overt liberty crushing dehumanizing aspects of sharia. unfortunately, it is an integrated whole. it is proven historically very, very difficult for muslims dead desacralized sherry, sacralize it and to eliminate he politicalliberty crushing aspects from the simple religious ritual. lou: so the arabs bring ithat context of our recent article euro u.s. policymakers it penalized by the murder of libyan ambassadors christopher stephens, sacrificed u.s. laws -- lives, our nation's all by cynically ignoring sharia doctrines and practices. how should the united states appear responding? as you assert, the legacy of islamic totalitarianism, you are saying it is an arab spring that ends with a totalitarian winter. >> we have choices in the middle east. we have a secular leading despot's to we chose to undermine and replace, mubarak, even duffy, and yet what is the

replacement? the replacement, we knew from the get go, and we actually supported the muslim brotherhood yacht this who have a sharia supremacist outlook and were still, the late ambassador stevens unfortunately chose to go into the hotbed of libya which dates back to the worse. and promote overt people who we know from the pentagon report in august were directly aligned with terrorists. lou: we thank you for being with us. we will continue this conversation. the book is sharianight. straight ahead. president obama's first call after winning his second term went to president bill clinton. a, happened to governor chris christie? former clinton special counsel and steven haze of the weekly standard join us. americans are always ready to work hard for a better future.

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♪ lou: exit polls show a deepen -- deepening racial divide. putting president obama over the top both in the electorate and the strength of support. joining us, former special counsel to president clinton, steven hayes, senior writer for the weekly standa, both fox these contributors. i am uncomfortable saying that this is such a big deal, but the polls suggest something. look at these very quickly. the makeup of the electorate, not appreciable difference from 2008. if we could look at that graphic . 74 perce back end of weight. 72 percent this year. we see the numbers rise slightly

. staying about the same. the reality is that the support for resident obama of monks in the demographic groups, if we could take a look at that, the support for president obama, i'm sure that this is, you know, very interesting. he lost about four points of support. he lost support as well down 2%. hispanics picked up 4%. asians picked up rearkably. a very small percentage. that does not look like such a big deal because it represents basically what happened in l.a. >> we have to look at politics. this network is trying to explain why he predicted a romney landslide, and a lot of other conservatives are trying to blame in all on romney.

it reminds me of what we democrats winter after 1972. the late and beloved note george mcgovern no longer with us was blamed for the landslide a 72. we lost 80, 84, in '88 and they're still blaming the candid it's. it was not the candid, and it was not the way he communicated. it was the message. it was -- it took bill clinton to redo the map and barack obamacare continued that legacy. the reason why the hispanic vote went for broke, is because bit romney made him look liberal on immigration policy. did not follow george bush's policies and innovation, or you might have been president. it is about content, not the communication. lou: is not one to answer my question on the racial divide. i will try with you. >> well, i think the numbers

speak for themselves. the fact that the electorate this time, the change in the percentages among white voters. if the romney campaign got al, the percentages they thought they needed to we might be talking about a different result . much bigger story to the failure to provide a clear contrast in competing views of the way that the country is going to move toward. lou: a clear contrast. basically the republicans took the day off. they just didn't show up. these are extraordinary numbers, the level of turnover republicans. i'm hearing all of this stuff from have reached to this group, change the message, adopt policies, and all of which may be true. i would support it, but the fact is, that does not look like the reason that romney lost. does it? >> well, i'm sorry if i did not directly answer your message.

that is not the reason. lou: we will catch up. >> they're racial analysis is not the reason that romney african americans supported a fellow african american the same way irish catholics to, but if barack obama had been against helping people who are i the underclass, the lower economic level, if he had not proposed policies that african americans can support then take a look at women. the fat that mitt romney was still talking about the pro-life position and the anti-gay rights position on social issues, h lost because of his message to hispanics because he s in favor of self supporting 11 million people. that is why i mentioned his positions and their substance is not what i think it -- it means there was contrast. lou: what do you mean?

>> there are a number of areas in which there was not enough contrast. if you look at the way that romney talked about tax, apologetic. very effectively made mitt romney looked like he was going to raise taxes on the middle-class. thatas the cry based on this one study weeks and weeks and weeks. any timime the republican candidate is viewed as the tax sector. in many had to defend his position in the debate he was a way out of his way to say, if you are wealthy and all you're not getting any tax cuts, and it was a defensive argument on a fundamental issue rather than pointing president obama had twice argue in public that raising taxes in an economic downturn would doom the economy. the president of the united states said that and iran on a proposal. lou: two things that seem

peculiar. i would love for both of you to respond. i heard a lot of bonn, about the tea party. the tea party did not exist in this election. it was a non factor. why in the world would there be so much concern in the republican party about the tea party. why was there an idea that you're better off today than you were four years ago and pick 2008 as the year, the baseline, and it was a lousy year. in point of fact, just about everybody is. what do you make? very quickly. >> your immediate question, yes, we were better off han the depths of being in a whole. president clinton explained the argument that we were climbing out. by that time election day, the percentage of people is of the country going in their right

correction, saw the economy improving, higher than has been, ronald reagan when he was reelected. lou: i don't have the time. >> he was there. lou: this is the -- why did he call -- mixing his old boss. why did he not call first governor chris christie who gave him the photo op, four and half hours and a big hug there was persuasive to just about 15 percent of the voters. should that not have been his first document. >> probably did not want to run again. facing a lot of questions like those. lou: there are no questions. a man and it is president the gilded photo, embedded in the minds of 15 percent of the voters. >> i agree. i said that before. as said it would happen. i thought that was going to be a

big factor, and it turns out it was. i don't think it ends up deciding the election. lots of other things that ended up, but there is no question that having chris christie give president obama that figurative and literal embrace of the national stage a week before the election when he was the keynote speaker at the republican convention was held to the president's. >> and the your out of time. of all was right on the issue according to the poll and is supported his position. lou: we will take note of two things. your candid one. your former boss played a big part. we would both agree that governor christie probably should have been telling you know, a conference call to the both of t joins us. don't you love it?

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benghazi investigation. joining us now, host of "huckabee" on the fox news channel. and author of the brand-new book. it is great to have you here. congratulations on the new book.

>> thank you, thought we needed something other than politics for a while. what do we have? like the song by the who, meet the new boss, same as the old boss. lou: i cling to those politics so desrately here. your reaction to the fact the smartest man in the military was there, turned out to be head of the cia, the dumbest spy we ever had. >> not a good week for spies. when you addo the drama of general allen and the ever-expanding scandal, it is tragic for their families, tragic for america. lou: the part that is tragic for us. in our various institutions, since there are no consequences.

sitting in an aircraft, we have a pretty strong light, and this actually the architect and the guy who presided over the largest conflict in american history, a conflict we have not won. >> to his credit, we have to give general petraeus credit. he is paid a price, nobody comes a general without slipping up to the top. i have extraordinary respect for these folks. lou: you say these folks. no one respects for supports more or military than i do. if you will, i will n indulge the plural.

i'm talking about a man who sent the cia down the gutter. >> i will not defend what did, you can't. lou: why don't we try to get to what is going on. why are we putting up with this kind of nonsense and recognizing there is a culture the military and inashington that we have to get a hold of. >> i think it is a culture all over our society. look at the sports world. virtually no part of our culture in which people don't feel they don't have to be faithful to their congress or their spouse or their families and to their jobs. the ceo of lockheed martin just today forced out. it is a pattern and it is not limited to the military. it permeates the entire american culture because we have said that we can pretty much do what we want to. we spent a generation saying there is no such thing as rality, it is old-fashioned.

lou: that would be your generation and mine. >> that is exactly right. no thought of divorce, live and let live, free drugs, freeex, what do we expect? i think what we're doin we are e planted seeds when we were young and now they have turned into full and it is choking us. lou: what do you think should happen next? >> the one positive out of it is not yet permeated the% mainstream media. they will not be able to ignore it as a result of these scandals that will now bring attention to it but ner would have before. lou: ithe most perverse

matter, petraeus may have done the nation a service for at least a portion of the damage she has done with his conduct. i want to turn to, if i may. >> it isn't your show, you can do what you want to. lou: i feel compelled to talk about something other than politics because your lament about politics from the beginning. the grandfather's thoughts on things that matter most, we are at the very least could talk about the things that matter most as we talk. love the fact you are embracing your grandchildren. i have five of them myself, proud of them all. >> you should be. lou: family is so important. >> we are not passing down to the next generation a sense of do right. we're not passing down to them this sense that there is

something as important as honor, duty, respect, responsibility. is is written for every parent and every grandparent. i know my grandkids will not read this until i am long gone. they will be in their 40s or 50s before they care, but they will want to connect with the people above them in order to connect the people coming after them. it is important we help to try to say we have made some real mistakes, but here are the things that matter. work, it matters to have respect for your parents, it matters to understand t world in which you live in, it matters to understand who god is, it matters to think about the purpose of pain and suffering in your life. that is what this book does. i think it is a perfect segue because that is what is wrong with our culture. we have a don't let me have responsibility, let somebody else pay the price, i just want to have a good time and have it to have a good time and have it can i help you?

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lou: it's time for your comments.